Here’s what Kansas Gov. Sam Brownback’s supply side economic experiment has wrought: The Republican’s massive tax cuts for the wealthy and businesses will cost the state a projected $5 billion in revenue over seven years; by this summer, legislators must address a $278 million revenue shortfall, which Brownback is looking to fill in part by slashing vital infrastructure spending and reducing contributions to the state’s already underfunded pension plan. Meanwhile, the tax cuts haven’t delivered the economic “shot of adrenaline” Brownback promised. Kansas’ GDP growth lags behind that of other states in the region, its rate of job growth is slower than that of the nation as a whole, and the state’s per-capita income ranking hasn’t changed since the tax cuts were enacted in 2012. Kansas is ascending the national rankings on one measure, however: Last year, it ranked seventh in the nation among states residents left.
Now comes the really astounding news. We know that despite the early signs warning of Kansas’ pending economic decline – make that plunge, the Missouri legislature took steps last year to take us in the same direction by overriding the Governojr’s veto of a disastrous tax-cut bill. And guess what? That tax cut hasn’t even kicked in yet and we’re already seeing that the state isn’t taking in enough revenue to keep the store open:
— The The Missouri Department of Transportation has indicated that they will only be able to handle routine maintenance for a fraction of the state’s roads and highways.
— On the heels of the President’s promotion of free community college, we learn that the state’s A+ program, which aimed to lessen the expense of two-year education for Missouri students, will probably have to be scaled back because it is so severely underfunded.
— Last year, the U.S. Department of Agriculture’s Food and Nutrition Service reported that Missouri refused food aid to more needy people than any other state in the nation. This failure to meet basic social safety net needs was a direct result of an “overhaul” of the Department of Social Services meant to cut costs and, of course, “increase efficiency.” Unfortunately, in common with so many moves to increase efficiency by reducing resources, the result is poor or non-existent service.
— The same problems that affect food stamp distribution characterize the administration of Missouri Medicaid.
There’s lots more if you’re looking for evidence of decline. What you wanna bet tax cuts won’t fix those problems here anymore than they did in Kansas? I could write all day about the problems that Missourians face thanks to the prevalent Republican ideology that views paying for our collective needs via taxation as the original scourge of Satan.
The worst part of this situation is that although this cut-taxes or, alternatively, institute-a-regressive-sales-tax policy-making is failing in all those states trying it, the GOP everywhere continues to tirelessly push forward with more of the same. Reports are that Brownback plans to double down and totally beggar Kansas. Here in Missouri, State Senator Eric Schmidt has filed a bill to make last year’s tax cut even more draconian:
Mr. Schmitt’s Senate Bill 4, pre-filed in early December, would increase the size of the $621 million tax cut, perhaps to $1 billion or more. The top personal income rate would be reduced from 6 percent to 5 percent, instead of the 5.5 percent enacted by last year’s tax-cut bill. The tax rate for corporate “pass-through” income treated as personal income – by sole proprietors, partnerships, limited liability corporations and subchapter S corporations – would be cut to 50 percent. Last year’s bill cut it to 75 percent.
There are other signs that our intrepid Republican legislators haven’t got a clue. Faced with a big, soon to be visible problem with the state’s transportation infrastructure, there doesn’t seem to be any will to abandon the GOP’s collective no-tax delusion. There’s the inevitable talk about robbing poverty stricken Peter to pay pauper Paul, that is, securing transportation funds, for instance, by cutting the resources of other bare-bones agencies and programs. To no one’s surprise, there seem to be murmurings that we’ll have to revisit that sales tax that was defeated last year. The hope seems to be that folks will have learned their lesson and will finally just suck it up as long as the GOP stands firm against fair, progressive taxes. As Luke Brinker notes in the Salon article:
A study released this week underscores one of the most pernicious effects of such a tax regime: It exacerbates inequality. The Institute on Taxation and Economic Policy found that “[v]irtually every state’s tax system is fundamentally unfair,” with state and local taxes eating disproportionately into lower-income workers’ wages. But the effect was far worse in states with low or no income tax. In the Institute’s “Terrible 10″ states, the bottom quintile of wage earners pay up to seven times as much of their income in taxes as the top one percent does. The worst offender was Washington state, which has no individual income tax. The remaining states on the list were Florida, Texas, South Dakota, and Tennessee, which all lack individual income taxes; Illinois and Indiana, which tax individual incomes at a flat rate; and Pennsylvania, Arizona, and Kansas.
I’ve got a bad feeling that we’ll be able to add Missouri to that list sometime in the near future. But hey! We may be on the fast path to Poverty Flats, but we can take solace in the fact that we’ll be living the Republican, low-tax dream on the way.